Any person desiring to hold a closing out sale in the city must obtain a closing out sale license. Application for such license shall be made to the director of finance in writing not less than five days prior to the date the proposed sale is to start. The applicant must possess a valid city of Santa Cruz business license tax certificate.

“Closing out sale” means a sale held, or advertised, in such a manner as to cause the public to reasonably believe that, upon the disposal of the goods on hand, the business being closed out at that location will cease to operate, and that upon conclusion of the closing out sale no similar business will be operated at that location by the same person or persons, either individually or as partners or principals in a corporation.

The application for a closing out sale license shall set forth the following:

(1) The full name of the applicant; that is, the name of the proprietor, names of all general partners or the name of the corporation and its principal officers;

(2) The specific type of business for which application for closing out sale license is made;

(3) The location of the proposed sale;

(4) The nature of the occupancy;

(5) The reason for the proposed sale;

(6) A full, true and correct inventory or statement setting forth the amount and description of the goods, wares, merchandise and personal property to be sold at such sale, with satisfactory evidence that the goods, commodities or personal property proposed to be sold are a bona fide part of the applicant’s stock in trade and not secured, purchased or brought into said place of business for or in anticipation of said sale;

(7) The dates upon or during which the proposed sale is to be conducted; and

(8) The date upon which the applicant first received his or her city of Santa Cruz business license tax certificate and the number of years and months applicant has continuously operated the subject business in the city.

Only businesses which have continuously operated in the city with a valid city of Santa Cruz business license tax certificate for the three-year period immediately preceding the date of the closing out sale license application shall be eligible to apply for an extension of their closing out sale license. Eligible businesses may apply for closing out sale license extensions subject to the limitations set forth in this section.

The license may be extended beyond the initial sixty-day sale period, in thirty-day increments, up to a maximum of one hundred fifty days (inclusive of the initial sixty-day period), for a fee of $75.00 for each thirty-day extension period. An eligible business wishing to conduct a closing out sale for more than sixty days must apply in writing to the director of finance to extend the license for an additional thirty-day period. The extension request must be received at least five days before the date the license is currently set to expire, and must state the facts supporting the need to conduct the sale for the additional thirty-day extension period. In no instance may the closing out sale exceed a total of one hundred fifty consecutive days, including the maximum three thirty-day extension periods.

After the period for which the closing out sale license shall have been granted, including any extension periods, the license shall expire and shall be of no further force or effect. No new business similar in nature to that described in the application for the closing out sale license shall be engaged in or conducted by the same person, whether as sole proprietor, general partner, or principal officer or majority shareholder in a corporation, within six months after the expiration of the closing out sale license.